GM about to announce plant closings?

[Curt]

That sucks. I hate it, when OK gets hit by something like this.

Try living in Detroit..now you know how we feel here. At work the other day we all got our e mail from Mark Fields of Ford Motor Company..things dont look good. Again I am going to have to rant here..does everyone still feel like there is going to be jobs for all the kids growing up here in 20 years? and do you think it's high time we shut the doors and start taking care of our own here and bring lost jobs back? I may not have a job after the first of the year because of people not supporting America and American companies, and what is this going to mean for OKC? just when your economy was looking good and things were looking up. I am sorry people but it is time to **** or get off of the pot:

Team,

As our plans for the Way Forward come together, I've
made a commitment to honest, open and immediate
communications with employees. This includes telling
the Ford team first about the steps we will take in
the weeks and months ahead to return our North America
business to profitability.

Our leadership team has put into motion the difficult
but necessary decision to further reduce our
salaried-related personnel costs in North America by
an average of about 10 percent. This will affect every
function, including our corporate staffs, and will
involve the reduction of salaried, agency and
purchased services costs equivalent to about 4,000
positions. We will announce full details of our Way
Forward plan in January 2006 and anticipate that these
salaried-related cost reductions will be primarily
completed by the end of the first quarter.

Separating members of the Ford team is not easy, nor
is it something we take lightly. As our leadership and
Human Resources teams begin to implement the
involuntary separations that are part of this plan,
their priority at every step of the way will be to
provide support for those affected directly by these
actions as well as for everyone else on the team.

A leaner, flatter organization will be part of the Way
Forward plan we announce in January. The Way Forward
plan will be built around three pillars:

- Clarifying our brands for stronger emotional
appeal
- Strengthening our line-up with more great
products
- Achieving improved quality, costs, growth and
profitability - all at the same time

The salaried-related cost reductions, obviously, are
part of the third element of our plan. The reality is
that the best of the competition is more competitive
than we are on quality and costs, more efficient than
us in their operations, and they're achieving
market-share growth and sizeable profitability all at
the same time. We can and must do the same.

We know this is a period of anxiety and uncertainty.
That is why it is more important than ever that we
accelerate the communications and provide our
employees with the candid facts about our business and
the actions we are taking.

We will discuss our plans in more detail in January.
But we wanted you to receive the first word about our
salaried-related cost-cutting efforts from your
leadership as quickly as possible - rather than
through the local media.

- Mark Fields

[Curt]

The only thing that may save my job here is the fact I work on the development of the Hybrids and Hydrogen fuel cells.

[markar]

I'm (along with many others) losing my job Dec. 31 and I don't even work for GM! More competition in the job hunt now it looks like. Think we are going to look at this as an "opportunity" to relocate and see what else is out there.

[ccsokc]

This announcement is just absolutly awful, the most awful business news to hit OKC since I moved here. My heart goes out to any and everyone who are affected by the closing. It is just sad....

[Curt]

The scary part of all this is...most manufacturing and technical related jobs in this country..and in fact the world are somehow tied in with the auto industry.

[Pete]

This is a good article that summarizes all the big challenges GM is facing, and how are not responding to them well:





A number of problems depress profitability for GM



By Paul Monies
The Oklahoman

A bank that happens to make cars. A health care provider that assembles trucks.

Of all the critiques of General Motors Corp., analysts say a simple one keeps rising to the top: the company is not designing and building the kinds of vehicles people want to buy.

With Japanese rival Toyota Motor Corp. snapping at its heels, GM's days as the world's largest automaker could come to an end as soon as next year. The company faces a multitude of problems, including:

Declining market share in North America. GM has seen its share drop to 26 percent, down from roughly 40 percent in 1985.

High labor and health care costs. GM is the largest private provider of health care in the United States, covering 1.1 million retirees, employees and their dependents.

An aging work force and pension obligations of $6 billion.

An over-reliance on large trucks and sport utility vehicles for profits as high gasoline prices prompt consumers back to cars and fuel-efficient vehicles such as hybrids.

Fallout from bankrupt supplier and former subsidiary Delphi Corp., which faces a looming showdown with its unions over pay and benefit cuts. GM is responsible for billions in Delphi's retiree obligations.

To address those problems, GM announced last week it would cut 30,000 jobs and close 12 facilities -- including Oklahoma City -- by 2008. Much of the job losses would come from early retirement and attrition. GM plans a "product renaissance" that will emphasize growth areas such as crossovers, compact and luxury sport utility vehicles, large pickups and entry-level luxury cars. Sales and marketing practices also will be revamped, the company said.

GM sits on $19 billion in cash and insists bankruptcy is not in its future. To shore up its junk-level investment rating, the company also put a 51 percent stake in profitable financing unit General Motors Acceptance Corp. on the block. Analysts expect that stake to sell for between $10 billion and $15 billion. In years past, earnings from GMAC have helped GM through rough patches in the automotive market.

Meanwhile, leaders at the United Auto Workers union blasted GM's manufacturing cuts, saying the workers who will be hardest hit aren't responsible for the automaker's troubles.

"We have said consistently that General Motors cannot shrink itself to prosperity," said UAW President Ron Gettelfinger. "In fact, shrinking General Motors only exacerbates its problems. ... GM's return to prosperity depends on it offering products that consumers find attractive, exciting and want to buy."

For GM retiree Carolyn F. Gardner of Guthrie, those vehicles can't come soon enough. She retired in 2004 after 25 years at the Oklahoma City plant. The former farmer took the job at age 46 and spent most of her time driving forklifts at the factory.

"They are too diversified, and nobody cares about building cars," Gardner, 72, said of GM's business model. "All the cars look alike, and GM hasn't done anything innovative for a while."

Analyst David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., said GM can return to profitability, but it won't be easy.

"They need to shrink to a profitable point, and that will create a platform for future growth," Cole said.

GM expects to save $7 billion in 2006 from cuts in manufacturing and from recently negotiated savings in health care from union workers and retirees. Cole said those cost savings translate into $1,500 per vehicle, still far short of the $2,000 to $2,500 per vehicle in savings he estimates GM needs to become competitive in North America. Foreign automakers such as Toyota and BMW have younger U.S. work forces and fewer pension obligations. In their native countries, the government picks up the tab for employee health care.

"The big story is not just Ford or GM versus the Japanese or Koreans," Cole said. "It's really the old versus the new. Any established organization -- it could be a steel company, airline or car company -- that's been in business for a long time, has a broad collection of employees and isn't growing is facing serious difficulties."

Around the world, GM has shown success with sales growth in China. It is improving in Europe after several years of difficulties there. But customers in the U.S. buy about 17 million vehicles each year, so success here is paramount for any automaker.

"The North American thing is so big in terms of the impact," Cole said. "If you've got a problem here, I don't care how good your other places are, you've got a problem," Cole said.

Catherine Madden, an analyst with Global Insight in Lexington, Mass., said GM's plans to reduce its manufacturing capacity don't go far enough.

"Although this will help reduce some of the fixed costs and reduce under-utilization, there's still important steps over the next 24 months," Madden said. "Particularly on how consumers respond to upcoming product launches and delivering products that the consumer is excited and enthusiastic about and wants to go out and buy."

GM claims it's turned the corner on bringing exciting vehicles to the market. The company will debut new versions of its full-size pickups and sport utility vehicles in the next two years, all of which get significantly better gas mileage than current versions.

Meanwhile, niche products such as the Chevy SSR, a ZZ Top-inspired convertible pickup/hot rod, attracted rave reviews from designers. But GM canceled the model last week amid poor sales.

[Patrick]

I read one article over the weekend that mentioned that GM has lost sales since 1985. That makes complete sense to me. After 85, most GM's were junk. Before 85, GM actually produced a solid car.
The reason most people are buying foreign, is because you get a better quality product for your money.

I rented a car this past year at DFW airport. They gave me a choice between a Toyota Prius and a Chevy Cavalier. I first got into the Cavalier, thinking I would take it. The car just felt cheap and flimsy. I decided to leave the Chevy, and try the Toyota. The Toyota was much more solid!

I think it's more a quality issue for GM. Their cars look nice, and are very useable, but they're not built well. They're like a rock...in other words, they're non-motile, because they're always broken down!

[Curt]

Rather than start a new thread on this, I see it as a somewhat related story since Delphi is a spin off of GM. Got this at work today.



Delphi Chairman and Chief Executive Robert S. Steve Miller has said in various interviews the compensation program is necessary to keep top executives around during the bankruptcy process. He said while hourly workers are overpaid at Delphi, its top managers and executives are underpaid.

Under its proposed employee-compensation plan, Delphi would allocate $21.8 million for cash bonuses to executives during the first six months of bankruptcy, and then an additional $87.9 million for 486 U.S. executives who would receive 30% to 250% of their salaries once Delphi emerges from bankruptcy.

There is then a severance package under which Delphi's top 21 officers would collect up to 18 months' salary and target bonuses, 89 other executives would get a year's salary and bonuses, and 373 officials would receive a year's pay.
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This just shows that the auto makers problems of having to find cheaper ways of doing things has nothing to
do with changes or economy. It's all their attitudes that they actually DO something in the company and the ones
that actually DO do work to keep the company going, make too much. They really think that decision making
is worth 6, 8, 12, 25 times what we make.

[Keith]

Backtracking unlikely for GM........





GM said unlikely to backtrack on plant closure

By The Associated Press

No change is expected in plans by General Motors Corp. to cease production at its Oklahoma City plant despite a major incentives package proposed by Gov. Brad Henry and a meeting he will have with company executives, a GM source who spoke on condition of anonymity said Tuesday.


Henry plans a meeting with company representatives Wednesday to discuss the incentives package, which includes concessions from auto workers and plant suppliers and a $200 million bond issue to help retool the plant. Following the meeting, he was to publicly discuss the pending closure of the plant, which employs more than 2,200 people.

Henry has said the incentives package was a long-shot, but that it was worth trying given the plant's major impact on the state's economy.

GM is to close the plant on Feb. 21 as part of a restructuring plan to cut 30,000 hourly jobs and shutter 12 facilities by 2008 to bring production in line with demand. In addition to the plant workers who will by laid off, economists estimate more than 7,000 jobs would be lost at suppliers and in other sectors across Oklahoma.

Speaking to the Oklahoma Press Association's midwinter meeting last weekend, Henry called his incentive plan an "eye-popping proposal" that had received GM's attention.
The factory has been making seven-passenger Chevrolet TrailBlazers and GMC Envoys.

GM has been hurt by sagging demand for sport utility vehicles. It has lost some of its market share to Asian imports at a time when it is facing high labor, pension, health care and materials costs.
Workers at the Oklahoma City plant will receive pay and benefits under a union contract that won't expire until September 2007.

[keving]

Listening to NPR last week, I heard this story of "job banks" that both Ford and GM have. Basically, they have idled workers do community service while still getting full pay and benefits. However, some workers do nothing but sit around and watch tv or play cards.

The article can be found at http://www.npr.org/templates/story/s...toryId=5194984. There is also an audio piece to it as well.

Paying workers not to make your product would seem a costly proposition for any company. But the Big Three carmakers have been doing just that for years. The little-known Jobs Bank program pays thousands of autoworkers who lost their jobs due to outsourcing or changing technology.

Ford has 1,100 workers in its jobs bank. Analysts estimate General Motors has more than 5,000. But GM CEO Rick Wagoner has said his company can't keep up with the costs, which he says runs to $400 million a year.

[windowphobe]

Still, it's a negotiated item; he's stuck with it until the UAW contract expires.